US ISM Services PMI in focus ahead of next week's CPI

Markets are in a consolidation phase on Monday as traders await the US ISM Services PMI release later today, with the focus already shifting to next Tuesday's US CPI report. The ISM Services index is expected to ease to 54.0 from 54.5 in the prior month, while the S&P Global US Services PMI showed a small uptick but at a subdued pace. Eurozone Retail Sales and PPI data are also due but are considered low-tier releases unlikely to alter ECB policy expectations.

The ISM Services PMI matters for interest rate traders because it provides a timely read on the dominant US services sector, which influences the Fed's dual mandate of maximum employment and price stability. A softer reading could reinforce expectations that the Fed may pause or cut rates later this year, while a surprise upside would support the case for holding rates steady. The market is currently pricing in a high probability of a rate cut by year-end, but the upcoming CPI will be the key test. Traders can follow live rate movements on NowPrice's dashboard as the data hits.

Looking ahead, the main event remains the US CPI report next Tuesday, which will be the primary driver of rate expectations after last week's NFP data failed to shift the narrative. The ISM Services release today may set the tone but is unlikely to be a game-changer. Also watch for any Fed commentary later in the week, as officials may offer clues on the rate path ahead of the blackout period.